Medicare Cost Hike Stirs Congress Debate

WASHINGTON – Conservatives expressed little surprise, and anger in private, as administration officials said President Bush (search) now estimates the new Medicare overhaul law will cost a third more than projected when Congress passed the legislation last year.

The president's budget, to be released Monday, will also project a federal deficit this year of about $520 billion, congressional aides said. That would far exceed this year's $375 billion, the highest ever in dollar terms.

The budget will estimate the price of retooling Medicare and adding prescription drug benefits at $534 billion over the decade ending 2013, officials said. The figures, first revealed Thursday by congressional aides speaking on condition of anonymity, were confirmed by administration officials.

While hunting for the votes they needed to nudge the bill through, Bush and administration officials as well as top congressional Republicans told wavering conservatives they believed the bill's costs would track the nonpartisan Congressional Budget Office (news - web sites)'s $395 billion estimate.

Bush signed the Medicare bill Dec. 8, giving him a legislative victory that he intends to promote during his re-election campaign.

"It points again to the No. 1 agenda item that needs to be addressed by Congress," Rep. Jeb Hensarling (search), R-Texas, said of the new figures. "We've got to protect the family budget from the federal budget."

Hensarling was among several conservatives who voted for the measure after being told by Bush and House Speaker Dennis Hastert (search), R-Ill., that the costs should follow the CBO projections.

Other conservatives said privately they were owed an explanation as to why the White House did not provide them with the figures before they voted. Administration officials said the new cost estimate was not ready until now.

"Very messy," said Joe Antos, a health policy expert at the conservative American Enterprise Institute, describing the reaction among conservative lawmakers.

He said many of them felt "brow beaten" into backing the legislation, which passed the House in November by five votes after leaders held the roll call open nearly three hours while nailing down support.

The new figures, the first time the White House has released projections of the Medicare bill's costs, could deepen a rift between the White House and conservatives already upset over spending and budget deficits on Bush's watch.

White House spokesman Trent Duffy and other administration officials said the estimating difference with the Congressional Budget Office was understandable and relatively close, considering the millions of beneficiaries, hundreds of billions of dollars and time period involved.

"The president made a commitment to seniors and he kept it, and part of that was providing prescription drug coverage," Duffy said. "The president is committed to making sure cost controls continue in Medicare."

Bush included a 10-year, $400 billion estimate for his broadly written plan for overhauling Medicare in his budget last February.

Democrats said the new estimate meant a bonus for drug companies and managed health care organizations, which have joined the ranks of their favorite election-year targets.

"Another $140 billion squandered on fly-by-night HMOs and astronomical drug industry profits. It's a proud day for the Bush administration," said Rep. Sherrod Brown of Ohio, top Democrat on the House Energy and Commerce's health subcommittee.

Nearly everyone expects the Medicare bill to get increasingly costly in coming years as the huge baby boom generation retires and medical expenses grow. Douglas Holtz-Eakin, director of the Congressional Budget Office, has said the measure's costs in its second decade could exceed $1.5 trillion.

Administration officials said they could not initially explain precisely why the projections differed. But Antos said it was probably due to estimating differences over the number of people expected to use federally subsidized health plans and health care tax breaks the bill creates.

Meanwhile, the administration released some positive news about their forthcoming budget, including proposals for:

• $45 million — a fourfold increase — for cleaning up the Great Lakes.

• An $18 million increase — to $122.5 million — for the National Endowment for the Arts.

• $60 million for a cattle identification system and other mad cow-related programs, up from $13 million this year.